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Privatization Blues

The deadly train crash in Greece which caused 57 deaths on February 28 has triggered an outpouring of public outrage. One look at the apocalyptic scene at the site and the near absurdity of a head on collision in this electronic age are enough to justify the anger at all those responsible. What is more difficult to rationalize is that many protests are pointing the finger at privatization of state run companies.

Of the two entities directly involved in the crash, one is a private company, Hellenic Train, formerly known as TrainOSE, which is responsible for running the trains on time. The other entity is the Hellenic Railways Organization, known by its Greek acronym OSE. It is a state-owned company which owns, maintains, and operates all railway infrastructure with the exception of the rapid transit network in Athens. Its employees who are facing charges are civil servants.

And yet, during two days of work strikes held to protest the crash, privatization was roundly denounced as one of the causes of the disaster. Inevitably perhaps the loudest voices blaming privatization were from one of strike’s the organizers, the Confederation of Greek Civil Servants’ Trade Unions, known as ADEDY.

This labor union is a fierce defendant of the interest of Greek public servants. Opposing privatizations and especially those of public utilities is one of its permanent planks. It also supports the reversal of many of the privatizations that have been implemented since the 1990s in Greece, a country in which lags behind most other European Union member states in this respect. ADEDY is also involved in supporting the demands of its constituent organizations. It stands by public school teachers who are unwilling to be subject to periodic performance evaluation.

Demonstrators are blaming not only privatizations but other causes they believe contributed to the crash beyond human error. They include clientelism, the practice of politicians in power rewarding their voters by placing them in a civil service position whether or not they are remotely qualified for the job. Pending the ongoing investigation, it appears this was the case with the station master and the other railroad officials directly involved in the fateful crash.

Clientelism was and is rampant if Greece, whatever party is in power. Egregious examples rarely come to light. But one example is that in the early 2000s, 80% of the persons given jobs in that state run company originated from two regions in Greece. Not coincidentally, the two government ministers who oversaw the staffing of that state-run company got elected in those two regions.

Lack of government oversight of the railroads is of course another issue highlighted by the protesters. It sounds odd that demonstrators can include criticism of the government and denunciations of political party favoritism right next to opposition to privatizations that would prevent self-serving politicians appointing unqualified employees.

Yet this is not that odd if we take into account that big government has positive connotations for many Greeks. According to a survey conducted in 2015 by the non-profit think tank Dianeosis, only 45% of respondents were in favor of privatizing public utilities and under 60% were in favor of privatizations in general. It would be interesting if a present-day survey delved deeper and solicited views about specific privatizations in Greece, especially those with which citizens have had direct experience. There are currently fourteen regional airports across Greece that have been miraculously transformed into clean, comfortable, and efficient transportation hubs after Fraport a German consortium took them off the hands of the Greek government. Another example is the state-owned telephone company OTE, which was catapulted into the mobile phones era only after being sold to Deutsche Telekom and other investors.

There are several other examples, though this is not to say that all privatizations in Greece were successful or done with the proper transparency, and those are reasons behind the public’s attitudes. There are deeper causes also. Greece a country in which the role of the state and state-controlled services and utilities has a long pedigree and provide security in the public mind.

Briefly, there are three moments in modern Greece’s history that the government had to assume a dominant role in the economy. The first was right after independence, because Greek entrepreneurs were mostly in the Diaspora, the second was with the influx of almost a million and a half destitute refugees following the Asia Minor Disaster of 1922, and third was in the 1950s in the wake of the country’s utter devastation during the previous decade. This in itself is a powerful and reassuring legacy which is hard to break. And it is reinforced by politicians who use jobs in the civil service and public sector to ensure electoral support.

Thus, because of the huge shock Greek society experienced because of the train crash, the default reaction is to demand more government control even though privatization was not to blame.

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This article is part of a continuing series dealing with reports of Greek POWs in Asia Minor in the Thessaloniki newspaper, Makedonia in July 1936.

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